In the end, I find it likely that the battle will come down to two things: Price and potential revolutionary feautures.
Kinect is an already-introduced accessory with dying hype, and personally I am doubtful it will have a huge impact on sales (especially with early adopters), unless it has some dramatically exciting features. Really interesting to see, where they have decided to go with it though
Games will likely be extremely similar between the nextbox and ps4, akin to this gen (third-party dominance). I find it extremely unlikely MS is able to secure any major exclusives, as the investment would be extreme (see for GTA, ES, Fifa, COD, BF and such - they would have to pay in hundreds of millions), thus I find the battle to be fought within the first-party games (they will likely secure some marketing campaign advantage with certain publishers though, but again, I guesstimate the same for Sony).
Thus...
The most worrying part especially with the AC- and used games -rumours is the price. I find it likely that PS4 will try to begin from the $399 price-point, which was what I estimated for Xbox too. But $499? The price-point was perhaps the most important reason for MS capturing the throne this gen from PS in the US, and shouldn't be underestimated. When there are two extremely similar consoles, consumers are gonna go for the cheaper one.
But again, if MS has some ace in a hole besides a revamped Kinect (I could be underestimating its pull), then they stand a major chance. PS4 took an extremely safe route, but the safe route is often the one to take (unless you're the Wii) as noted by ps2, xbox 360 etc (i.e. games, good entry-price, good usability). Windows 8 won't be it. It's a relatively toxic brand and has failed to gain any significant market share in either PC or mobile markets, and thus I am doubtful about its impact with xbox too. I doubt PS4's OS will be so horrendous that xbox will gain a significant edge here.
Will see though. Extremely interested in seeing, what special features they have in store. With all the negative rumours going on, it's no wonder that the word of mouth is slightly on the negative side, but all that can be countered by an impressive presentation in May. They have to bring in some revolutionary though, or else I doubt they will succeed in introducing such anti-consumer measures at a higher price point, and hope to get away with it. Will see.